The Hidden Negative Effects of Debt

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Personal debt can be attributed to any number of causes, be it a medical emergency, divorce, addiction, or simply unwise spending habits.

Many people know that they should steer clear of debt in order to enjoy strong financial health, but did you know that avoiding debt can promote stronger physical and mental health as well?

Here is a look at some negative effects of debt you may not have known about.

Impaired relationships

Rarely is debt an individual matter, as debt has a tendency to encroach on relationships, marriages, and family relationships. A spouse or partner, for example, may begin to resent their significant other as a means of coping with debt.

They may blame their significant other for irresponsible spending habits, bringing more debt into the relationship, not making enough money, losing a job, etc.

Or, they may choose to hide their debt from their significant other completely, ultimately leading to impaired communication and trust.




One study conducted at Kansas State University found that arguments about money are a top predictor of divorce, while another survey by Consumer Credit Counselling Service (CCCS) reports that an estimated 37 percent of people with debt problems had those problems adversely affect their relationship with their partner.

Romantic relationships are not the only ones harmed, either. A person with debt might, for example, begin to resent their employer for not giving them enough money or for not giving them a raise.

Or, someone with debt might resent friends and family members who are financially dependent on them or who tempt them to spend money they really shouldn’t be spending.

Trouble at work 

Because personal debt is so strongly correlated with increased levels of stress, debt can be a major hindrance in your life at work.

When you are constantly preoccupied with how you are going to pay your bills, your ability to focus on your work is likely going to suffer. If things get serious enough, your career may even be in jeopardy.

And even if you are able to keep your stresses about money from affecting you at work, financial trouble could potentially put you in trouble as you navigate the market.

Some companies actually require their job candidates to undergo a background check for employment, which may include a look into your credit history and other financial information.

If you have personal debt clouding your finances, it could tell an employer that you are not organized enough to complete work on time—or not responsible enough to make decisions that will affect the company’s finances.

Increased risk of mental health problems 

It really should come as no surprise that debt is so strongly correlated with mental health issues, as debt is one of the leading causes of stress today.

According to one study conducted at the University of Nottingham, people who struggle to pay off their debts and loans are more than twice as likely to experience mental health problems such as depression and severe anxiety. 

Moreover, 29 percent of people with high debt stress report having severe anxiety. Another study published in Social Science & Medicine had similar findings, reporting that high amounts of debt are associated with higher rates of stress and depression.

The Royal College of Psychologists even reports that one in two adults with debts has a mental health problem. In short, high levels of debt can contribute to the development of depression, suicidal tendencies, anxiety, addiction, and more.

And as this article points out, mental health problems such as addiction can lead to even more financial stress.

Impaired physical health 

The effects that debt can have on your physical health are surprising. First, of course, there are the health conditions that are commonly associated with stress.

Stress may cause you to eat unhealthy foods or overeat, for example, ultimately resulting in weight gain. Alternatively, it might contribute to insomnia or restlessness, or over time, weaken your immune system.

Chronic stress can also increase your blood pressure, which in turn puts you at higher risk of hypertension, heart disease, and stroke.

And finally, many people who are battling debt choose to forego the healthcare they need in order to save money. Ultimately, this decision can be highly detrimental to your physical health.

5 Ways to Prepare Financially for Retirement

Everyone dreams of the day they’ll get retired, but romantic projection we have of retirement is often completely different from the harsh reality that often involves financial difficulties, loneliness and decrease in overall health.

The pension is usually much lower than our pay, which often makes new pensioners rethink about their spending habits and lifestyle. 

Still, retirement doesn’t have to be burdened by financial difficulties if the right financial strategy is applied even before the golden age takes place.

1. Don’t Rely Only on Savings

The fact is that nowadays people live longer than they did 50 years ago and often savings aren’t enough to live the lifestyle we are used to. 

So, before retiring make a financial plan that will make you money, even when the paycheck is gone. It can be investing in binary options, stocks, forex markets, or unsheltered savings.

It is always good to ask your accountant what are the possibilities or rely on a financial advisor who will make you a proper investing plan for the retirement.

2. Know Your Expenses

It is important to understand where all that money you make is going and to adjust your expenses to your possibilities while taking your future into consideration. 

Some researchers say that most people need 70-90% of their previous income to keep up with the lifestyle they had before the retirement, so it is important to rethink your priorities and needs before the first pension comes. 

Always have a real picture of your cost/income ratio.

3. Think Smaller

In our 30’s and 40’s we like to dream big, and we need big things, but once the children are on their own, all big things become a burden as they cost a significant amount of money. 

Try to cut costs before retirement by downsizing your home and getting rid of all unnecessary services. 

Find a cheaper mobile plan, get rid of expensive TV programs or TV on demand, and don’t be afraid to ask for a better deal or take your business elsewhere.

4. Reduce Your Debt

It is much easier to reduce your debt while still working than in retirement. People who efficiently handle their debts can enjoy their retirement care free. 

Besides getting rid of a credit card, student loans, and other types of debt, it is always good to check interest rates and fees charged by your bank. 

They may seem small, but they accumulate over time and can truly make a difference.

5. Review Your Will

Many things change over time and having an updated will gives you insurance that your estate will be distributed as you intended it. 

Periodical reviews of your will, will provide you the much more peaceful state of mind and will help your family in case of emergency. 

Also, sometimes thinking about future in that specific way, puts all things, including finances in a whole new way.

Why Would You Ever Want To Do Your Taxes Early?

If you live in the United States, why would you ever want to get your taxes done early? Well here are some things of note, that might change your mind about wanting to get your taxes done as early as possible. 

 Whenever it comes to doing taxes it usually isn’t enjoyable, thus these advantages to doing your taxes early, might just be the nudge that makes you want to get them done early this year!

FASTER TAX REFUNDS

Individuals that file their tax obligations earlier in the season will certainly obtain their refunds quicker than individuals that wait. The reason is rather simple-- less people submit earlier, so there is much less demand on the IRS team and systems to refine the return.

If you wait until later on in the period, you're sending your application throughout the optimal of the process. Generally, you placed on your own in a long line behind other procrastinators.

So if you're getting a reimbursement and you really require it, after that rush as well as submit your return. There is another alternative to your return quickly, with same day tax refund anticipation loans from Tax Refund Loans.

ADDITIONAL TIME TO PAY THE TAXES YOU OWE

Perhaps you're very certain you owe Uncle Sam money this year. It's not awfully encouraging to finish your taxes early, simply to need to pony up. Doing your taxes is boring enough as it is without needing to pay cash at the end of it.

It is essential to keep in mind that you do not have to pay Uncle Sam till the April 15th due date (April 18th in 2016), also if you do send your return early.

That means you could submit very early and make a prepare for just how you will certainly pay exactly what you owe. That's better than turning to a credit card development, 401( k) loan, or calling residence for money.

EASIER TO OBTAIN AID

Have you ever before been to an area reasonable and would like to know which food booth had the best food? There's one simple means: seek the longest lines.

Lines form for the best of the best, and also tax specialists are no various. If you can quickly reserve an appointment with a tax obligation expert on April 13th, after that you could wish to question their credentials.

On the various other hand, the professionals with the best credibility are usually reserved after mid-February. Filing early assists you in obtaining the advice you need.

Also if you have no plans to seek advice from a tax obligation specialist, you might intend to think about the "what if" factor. 

What happens if you do end up with a difficult concern? You don't intend to find out at a point where all the good accounting professionals are not available.

PROTECTING AGAINST IDENTITY THEFT

Last year, one of my pals waited till April 14th to submit her household's tax obligations. When she was to send her return online, she got a message claiming that she had already submitted her taxes.

Certainly she hadn't actually submitted her tax obligations, and this was no internet site glitch. What actually took place was that a thief sent a deceitful claim in her partner's name.

In 2014, virtually 3 million taxpayers were sufferers of tax fraud. You'll never see the cash from their bogus refund, but they will, as well as you may be left with a mess to clear.

So when thinking about doing your taxes, remember these advantages about doing them early, and you might just get them done early for once!

10 Reasons For Home Loan Rejection That You Weren’t Aware Of

After toiling for several months, or perhaps years, you finally save enough money to make the down payment on your dream home. But what happens if you collect all the documents required for Home Loan, and painstakingly fill out the applications, only to find out that your Home Loan been rejected?

Insufficient income and poor credit scores are some of the common causes for loan rejection. There are plenty of other obstacles on your path to loan approval that you might not have even considered to be a hindrance. These factors are sometimes portrayed in a subtle manner on your application. Lenders review many factors before they actually consider approving your loan application.

Here’s a list of reasons that could lead to your Home Loan getting rejected:

1. An Incomplete Education

If you’re a school or a college dropout, getting a Home Loan can be quite a challenge. A minimum qualification of at least a bachelor’s degree assures lenders that the risk of you being unemployed is minimum. Undergraduates have a rare chance of getting their Home Loan sanctioned.

2. Insufficient Work Experience

You might have waited all your life to get that dream house. So once you take up a job with a decent salary, there is a good chance you’d like to apply for Home Loan almost immediately. However, most lenders look for a work experience of at least 3 years, and even if you earn enough money, your Home Loan will most probably be rejected.

3. Stature of your Company

If your company is a start-up or has been financially unstable, the chances of loan rejection are high.

Lenders may ask for financial reports of the organisation you work with. Based on this report they can identify the profit margin of your company and choose whether to approve or reject your application. Lenders can identify if a financial dip in your organisation will have adverse effects and have a negative impact on your loan payments.

4. Change of Career

Job stability is an important aspect lenders consider and financial institutions look for a minimum of 3-year work experience. So, if you’re in between jobs and don’t meet this requirement, your loan application is instantly declined. Being a permanent employee of an organisation and having worked with that particular firm for at least three years is an added benefit.

Even if you choose to quit your job and take up a self-employed venture, the risk of loan rejections prevails. You need to successfully run your firm for at least 3 years. Lenders look for an increasing profit for at least 2 out of the 3 years, to trust you with their loan.

5. Joint Family

While being a part of a large household with your parents, in-laws, siblings, their spouses and children, might make your family ties stronger, it can have an obstructive impact on your Home Loan. Lesser the number of dependents, higher are the chances of loan approval.

Being in a joint family may also lead to situations where you have to co-own properties—maybe a bigger home that you could all live together in. Lenders are particular about the number of co-owners. Most lenders allow only 3-4 co-owners. Some financial institutions may approve up to 8 members as co-owners.

Keep these factors in mind when you apply for Home Loan if you’re living with your extended family.

6. Unapproved Builder and Property

With so many homes and apartment complexes coming up in every city, you can easily get lured into buying a home from an unapproved builder. This not only gets your loan rejected, but you will have to head to a different bank for a loan and you may not be able to get the desired interest rates or benefits.

In rare cases, some builders are approved only by some banks. Finding the right bank can eliminate the risk of the dismissal of your Home Loan.

There are some cases where the builder might be a reputed one and approved by your bank but the project itself hasn’t received an approval. Another possibility is that if the project is enormous, one of the phases could not have been approved.

A quick check on the builder and the property goes a long way, as far as your Home Loan is concerned.

7. Actual Value of Property

If your dream home’s actual cost is lesser than what you’ve received an estimate for, the bank can, and will, reject the loan request. The rejection can occur on the grounds of inflation, where one may have given a greater valuation estimate in order to get a higher loan amount.

You can find banks that overlook this shortcoming and approve your loan with very low rates of interest. The risk of not getting a good deal on the loan, along with the risk of rejection, makes the precise valuation of property a key factor.

8. Age of the Property

Make sure you buy property that is being built with quality standards that will allow it to last for at least the next four decades. Banks and NBFCs are particular about the longevity of the property. 

Most of the policies state that the building should be able to last for a minimum of 20 additional years, once the tenure has been served. If you’re buying an old property, ensure the building meets the required standards before you consider purchasing it.

9. Backing Someone Else’s Property

You may want to do your friends a favour by signing up to be a guarantor for their Home Loan. But think twice before you do this. If you also plan on applying for a Home Loan, this might be a bad idea as it blocks your eligibility to take up a Home Loan by yourself. 

10. Bounced Cheques

Your cheque could bounce due to a signature mismatch or insufficient funds in your account. A signature mismatch can leave a negative impression on your lender’s mind. Insufficient funds only make matters worse as the financial institution might blatantly reject your application.

The fact that your cheque has bounced creates reliability issues at the lender’s end. They might deeply contemplate giving you a loan if you haven’t even maintained the small amount of processing fee required for your Home Loan.

Just having a good credit score and having a high-paying job, aren’t sufficient for a guaranteed loan approval, despite being two of the major factors to be considered when you apply for a loan. Factors like self-contribution amount, the listing of your locale and previous occupant of your property—apart from the aforesaid reasons—can also lead to the rejection of your Home Loan application.